Exactly. High house prices are caused by a scarcity of houses. This scarcity is often due to restrictive local laws to release more land for housing and/or the permission to build up if there isn't sufficient land.
Property owners get to vote and they stand to realize 100% of their capital gains, but they aren't really subject to taxation.
This is unrelated to property taxes, which go to the city/town not the state.
Citizens that own property are very motivated to vote against construction and so far have shown extreme solidarity against allowing dense construction even in small zones. Meanwhile renters, who appear to be a slim majority of citizens in the area, are not organized and do not vote reliably.
How much any one group may or may not contribute in taxes has very little to do with political outcomes since taxes don't vote. At most there is an indirect effect as city budgets drive strategies to collect more revenue by officials. Those officials still answer only to voting citizens.
Rent control / stabilization gives them an incentive to not allow construction as perhaps they, like all humans, oppose change but now don't have to face the negative consequences of opposing it.
50% of apartments in NYC are under some form of rent control / stabilization.
When the Bay Area Renters Federation and Grow San Francisco started, I felt some joy. Finally, after all these years, here is a housing movement that I can support.
Newer homebuyers who are paying taxes on the actual market-value of their homes tend to spend far less time at Supervisor meetings.
While it might be more economically rational for newer homebuyers to be the ones fighting development, it hasn't been my observation that they are. Obviously I could be wrong, I'd love to hear stories of rampant NIMBYism among the newly-landed.
And do you think we can build enough housing to cause, say, a 10% drop, or a 30% drop? (Not saying we shouldn't try... just that it'll have a minor effect.)
The indirect costs where a taxi is more expencive because rent is more expencive means homeoners should be better off with a drop in prices. However, everyone acts like their own investment is the only important thing.
How we build is another topic but just focusing on underutilized properties and getting permissions and rights out of the way faster would make a huge difference in the cost - to - build. I come on HN to talk this a lot because I am a developer turned developer and if housing where as easy to build as software...you could drive a bus and not have to sleep in it.
The land value (as opposed to the value of the buildings on top) is being extracted by landowners rather than the community.
If instead it was taxed (by raising property taxes or LVT), this would have three follow on effects:
* Treating housing as a bar of gold would stop (buying it as a store of value and leaving it empty). This would free up a lot of space.
* The proceeds of the tax could be used to build more housing without slashing other parts of the budget.
* Rich home owners - those who need the money the least - would stop getting effective handouts from those who need the money the most (renters).
A lot of these people are really rich. They don't think like us poor people.
For many of them, the houses they buy and leave empty aren't investments. They already did their investing and made money. This is a key difference in the thinking; for many poor people, houses are considered an investment. These rich people aren't investing; they're spending or parking some of the money they made elsewhere. Buying a single apartment to rent out as an investment? How quaint. How small.
For some, this is something they buy to park their money in such a way that it can't be simply taken away (bank accounts can be frozen, gold or other such small items can be confiscated, but it's awfully difficult to simply take someone's house when that house is in a foreign country with strong property laws) and is unlikely to vanish overnight.
Secondly, it's my house, for me to live in if I feel like being in the area for a while. It's just nice to have my own place with my own personal belongings that I can leave there, and drop in or let family and friends use whenever I want. Sometimes, hotels just feel impersonal, and they're more public than I'd like, and I'd have to bring with me everything I needed.
What they are not doing is getting into the landlord business. As a very wealthy person with houses all over the world, I wouldn't want strangers living in my house. I wouldn't be able to keep my things there. I wouldn't be able to just use it or offer it to friends whenever I wanted. I could make a tiny bit of extra income by being a landlord? That extra income is worth less to me than having the house empty, available for me to use or dispose of however and whenever I feel like it.
so what do you suggest? make it illegal to not live in your house ? Have a city inspector drive by once a week and see if lights are on and cars are parked nearby ? Every homeowner has to show up every 90 days to get their property ownership license stamped ?
sure, having vacant houses is a waste of resources. but having wealthy people actually use their money - even in a wasteful manner - can be a good thing. more money moving through the economy is better than less money moving through the economy.
[1]http://fortune.com/2016/11/21/vancouver-vacant-property-tax-...
I also have huge issues with the government deciding what you can do with your property after you've bought and paid for it. If they can change the terms of your contract, worth 6 and 7 figures, that not only erodes faith in the real estate market but it effectively means you never own it in the first place (inb4 the tax-protester argument of "you never owned it anyway because tax". yes I know that).
All this happens when you go to fill out your taxes and declare your properties and primary residence. I don't want to tell people they can't do it, but they ought to pay the price for disallowing others to enjoy our most beautiful locations.
I also want to discourage anyone else from doing more landlording, and a tax break for you and others like you would work against that.
I've rented the same flat myself for ten years and barring any huge changes, it's in my financial interests to do so forever, rather than buy a house. That should be the common state, but it's more expensive in many places at the moment to rent than to buy. Which suggests, to my mind, that something should push that balance back the other way.
I just think it shouldn't be very profitable. There are some things a well run state or region can be very good at (and in a number of places around the world, is very good at); maintaining a rental housing stock or other such housing programme is one of them.
People have made your argument but with short-selling in the stock market: "short selling should be banned, there shouldn't be incentivized pessimism in the market", but those people overlook the fact that short-sellers are obligated to buy back, and they can create a bottom in the market when there otherwise wouldn't be one. (if XYZ corp just went up in flames, who the hell would want to buy them (thus allowing more people to unload their shares)? Why, short-sellers of course - because they have to )
Renting out to people during the 6 months of the year is already an incentive, you get a check each month. You might also get to talk to a few people, learn a few things and make some new friends. Not sure if there is renter insurance, but that might be nice in case you get a tenant that damages the place. A service like that might give property owners some peace of mind.
https://www.nytimes.com/news-event/shell-company-towers-of-s... "From Manhattan condominiums to California mansions to gentrifying neighborhoods in Brooklyn, shell companies are increasingly pervasive in the world of real estate. These articles explore the people behind the opaque deals."
Otherwise why on Vernon Blvd in LIC next to high rises are there 2 story rowhouses?
LES, West Village, parts of Park Slope, LIC have historic districts (I'm forgetting many of them)
Not my metaphor but I like it: imagine if there were laws restricting GM from making more than a million cars a year and we sat around complaining the Chinese were buying all the cars and there were none left for Americans. Would you get rid of the stupid law or ban the Chinese from buying our cars?
The analogy also breaks down in that housing is a bit of an exceptional issue here, unlike cars. You literally need shelter to survive, but you can always take public transit or use Uber. Remember, the article we're commenting about shows service workers without homes because they can't afford to pay rent.
Also, it's worth noting that, unlike some other users, I've never said anything about specific nationalities.